Global political tensions and disruption are to blame for a “challenging” start to FY20, according to Flight Centre’s managing director, Graham ‘Skroo’ Turner.
Speaking at the travel giant’s annual general meeting yesterday, Skroo said the first four months have been a “challenging period” as the company experienced “issues and disruptions that significantly impacted second-half results last year”.
“Our challenge so far this year has been translating solid top-line growth to the bottom line,” he said.
According to Skroo, there are a number of factors contributing to this including continued disruption to the Australian leisure business, a downturn in travel to the Dominican Republic (which is the biggest market for the brand’s US leisure customers), ongoing Brexit-related uncertainty, unrest in Hong Kong and underperformance in “some other areas”.
“Profit through to 31 October 2019 has been well down in comparison to a strong prior corresponding period, although TTV growth has been fairly strong,” Skroo said.
In Australia and New Zealand, Skroo said TTV had surpassed the prior-year record by 1.7 per cent in the brand’s corporate travel businesses, compared to 18 per cent globally.
However, leisure in Australia grew by 5.7 per cent, which is stronger than the global figure which sat at 4.5 per cent.
Online leisure sales in Australia doubled to more than $250million during the first quarter.
Flight Centre chairman, Garry Smith, also addressed the meeting, commenting on the diversity of the company’s board.
Smith said the board is currently made up of only 20 per cent women members, 25 if you exclude the company’s managing director and founder Graham ‘Skroo’ Turner.
This figure puts the company outside of the Australian Institute of Company Directors’ current target of 30 per cent female representation, Smith admitted.
“Some of our institutional investors and investor representative bodies such as the Australian Council of Superannuation Investors have adopted policies where they recommend a no vote on any director reappointments in companies that don’t meet their diversity policy target,” Smith said.
“That is currently the case for us and votes received in advance of the meeting regarding my reappointment to a certain extent reflect this point specifically.”
To reach that target, Flight Centre will have to either expand its current board by adding a female director or replace one of its current male directors.
“Our company has a good history of supporting diversity within our business and the board supports the target of 30 per cent female directors,” Smith said.
“It is our plan to meet that target.”
Smith said the board expects to appoint a woman director in the medium term, subject to a candidate meeting its targeted skills and being able to accept the role.
“In the past, we have been prepared to wait for the best director candidate to become available that could well be the case again in this instance,” he said.
Following his address, Smith was re-elected as director of the board, having served on the board for 12 years, the last five of which as chair.
Last month, Flight Centre set a target to make its senior leadership team 50 per cent female by 2020 at the brand’s annual Womenwise event.